There is uncertainty over what would be the cost of the Premium Motor Spirit (petrol) yesterday as the Federal Government approved 25 per cent freight rate for the product.
Freight rate is the cost of transporting (bridging) petrol in-country in order to maintain an equal pump price nationwide.
The last freight rate for the PMS was N7.15 per litre.
It was not however clear what the landing cost of petrol would be owing to the increase in one of the components in its pricing template.
Stakeholders in the downstream petrol sector had been pressing for increase in the freight rate.
Consequently, the Nigerian Association of Road Transport Owners (NARTO) in 2020 demanded for 26 per cent hike in cost of freight.
Meanwhile, its National President, Alhaji Yusuf Lawal Othman, last month told The Nation that the 26 per cent was no longer a reflection of the economic situation of the sector as the cost of tyres, battery, diesel and even trucks had risen above the 26 per cent.
In the briefing, he said upon the request for the 26 per cent increase, there was a Presidential of 10 per cent leaving a balance of 16 to be implemented.
He said: “Based on Presidential approval the first option was adopted by approving 10 per cent to be implemented immediately while the balance of 16 per cent was to be implemented based on the second option.
According to him last month, “To date this 16 per cent was yet to be implemented. Since then, unfortunately, the economic circumstance in the country have not been better.”
He said the operational costs keep growing up exponentially.
Othman said: “I wish to give you the following comparisons to underscore the point that our truck replacement costs and operational costs are now unbearable.”
Citing the cost, he said in 2020 a truck head was N20 million but it is now N35 million. Tires, he said were N35,000 now N150,000. He said a tank was N8 million but now N15 million.
He added that batteries were N32,000 then but now N120,000. Diesel, according to him, was N250,000 but now N420,000 while foreign exchange that was N315,000 at parallel market is now N570.
But in a short text message to The Nation yesterday, he said:
“Its official now 25 per cent Accross the board has been approved, it’s not what we sought but it’s the best we can get under the current template with pms pump price at N165 max.”
Recalled that it has been a prolonged demand from the defunct Petroleum Equalisation Fund (PEF) when the association on 4th February, 2020 sought the increase of the bridging cost from to N9.11 per litre from N7.15 per litre.
The Nigerian Downstream Midstream Petroleum Regulatory Authority (NMDPRA), General Manager, Public Affairs, Mr. Apollo Kimchi that The Nation dialed his phone to confirm the information did not respond.
Besides, he did not respond to the text message that sought to know about the issue.